Lululemon Athletica Inc. is moving into a new league on Wall Street Wednesday, when the active standout will be added to the S&P 500 stock index.
While the stock market game is the same as part of the index, the players can be different. That’s because many blue chip investors, including the big-time retirement funds, have charters that focus them on certain indexes or certain kinds of companies.
Opening up the door ways to a new group of investors can give even a big company a big boost in its stock price — and investors were positioning on Monday to take advantage of that.
Shares of Lululemon jumped 9.9 percent to $414.90 in morning trading.
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The S&P 500, which is meant to track the market’s 500 leading companies, is one of the widely cited and closely followed indices.
Constituent stocks generally have market capitalizations of at least $3.5 billion, four consecutive quarters of earnings and have at least 50 percent of their stock floating on the public market, according to S&P Capital IQ. Most of the companies come from the worlds of finance, health care, consumer, industrials and energy.
The quickly growing Lululemon’s stock market cap of $55.4 billion is much bigger than many of the fashion players already on the index, including Ralph Lauren Corp. ($7.3 billion), Tapestry Inc. ($6.4 billion) and VF Corp. ($6.2 billion).
The company just surpassed Target Corp. ($51.3 billion), but still has some chasing to do to catch up with Nike Inc. ($155.5 billion).
Lululemon certainly stands out as one of the strongest growth stories in fashion right now. Second-quarter net profits rose 18 percent to $341.6 million while revenue also increased 18 percent, to $2.2 billion.
The company is taking the spot in the index that was held by video game giant Activision Blizzard Inc.
This story was reported by WWD and originally appeared on WWD.com.
